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  • Subject area(s): Marketing
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  • Published on: 14th September 2019
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In 1999, Turkey was officially recognised as a candidate for EU Membership at the Helsinki summit. This initiative led to the execution of several political and economic reforms in the country. However, having a high corruption level and low political commitment, Turkey has difficulties attracting prospective international investors. In 2016, Turkey ranked in 75th place by the Transparency International in its Corruption Perception Index. (www.transparency.org, 2017) The problem of corruption is a huge challenge for the Turkish government and it can be seen that Turkey has further declined in rankings over the years, than improved. Therefore, the future outlook remains negative as the high corruption levels are results of weak political commitment.

New regulations and liberalisation policies of EU-orientation gave boost to company growth plans. In 2010 the European Union and Turkish authorities signed an air transport agreement which was an “important step towards further strengthening EU–Turkey aviation relations and will encourage traffic between the EU and Turkey. Air transport is crucial for relations between the EU and Turkey, linking people, cultures and businesses.” (Mobility and Transport, 2011)

Turkey has been a strong promoter of liberal trade and investment policies and the recent governments have shown a

sustained commitment to focus on improving economic policies. Turkey became a candidate for EU membership at the

Helsinki Summit in 1999. Nevertheless, increasing corruption and a perceived lack of political commitment continue to

discourage prospective international investors

Turkey has been a strong promoter of liberal trade and investment policies and the recent governments have shown a

sustained commitment to focus on improving economic policies. Turkey became a candidate for EU membership at the

Helsinki Summit in 1999. Nevertheless, increasing corruption and a perceived lack of political commitment continue to

discourage prospective international investors

Turkey has been a strong promoter of liberal trade and investment policies and the recent governments have shown a

sustained commitment to focus on improving economic policies. Turkey became a candidate for EU membership at the

Helsinki Summit in 1999. Nevertheless, increasing corruption and a perceived lack of political commitment continue to

discourage prospective international investors

Turkey has been a strong promoter of liberal trade and investment policies and the recent governments have shown a

sustained commitment to focus on improving economic policies. Turkey became a candidate for EU membership at the

Helsinki Summit in 1999. Nevertheless, increasing corruption and a perceived lack of political commitment continue to

discourage prospective international investors

The current situation on global economy and the pressures of rising fuel prices on the aviation sector has inevitable negative effects on the company as well as its competitors. As Turkey is becoming a more popular tourism destination, demand for transport to this destination increases consequently. World tourism organisation forecasts for the next ten years that the strongest growth in tourism volume will be in the east Mediterranean sub-region.

Aviation is rapidly changing the environment due to technical improvements made every day. To keep up to date, every airline carrier has to redecorate, improve and maintain their fleet so that they do not fall behind the competition. Technological advances can be seen in the airline industry as online bookings and check-ins for example.

Deregulation also gave power to international tourism in Turkey. Turkish airlines opened new routes to other countries. Therefore, “domestic and international passenger numbers increased rapidly.” (Sarilgan, 2016) They tried to introduce new market trends against competition. A significant outcome of deregulation in this context is the fact that the cost leadership strategy from Porter's competitive strategies is now visible in air transportation.

As a result of this change in the regulatory legal framework, barriers into the industry were removed. The structure of pricing policy and tariffs were restructured. Furthermore, demand for air transportation increased, and finally, the monopoly power of Turkish Airlines partly declined.

The five forces model was invented by Michael Porter. We use this model to analyse the micro environment. It is a “commonly used framework to analyse the competitive environment of an industry.” (Rahman et al., 2015) Porter proposes that there are five driving forces which are relevant to influence a company's position within the industry. It assesses the “attractiveness of the industry and also figures out the position of the company within the industry.” (Dess et al, 2007) The forces are commonly known as: The threat of new entrants, the threat of substitutes, the bargaining power of suppliers, the bargaining power of buyers and the competitive rivalry.

A key factor to take into consideration when linking this to Turkish Airlines is the rivalry of the airlines amongst its competitors. It is evident that premium airlines all compete to be the finest, whether this is through their pricing, their extent of comfort on-air, or the number of products/services they offer; Turkish Airlines has indefinitely emerged in the competition. 

The threat of new entrants is a major factor to consider. New airlines bring new competence for the market, desire to gain market shares and elevate the rivalry amongst competitors. New entrants can propose lower prices or even inflate costs. According to Loris, the threat of new entrants is low for Turkish Airlines as existing companies have already created a large amount of capital and a strong customer base. These factors allow “existing companies to lower their cost and taking the loss in order to beat the new entrants. Consumers tend to choose reputable and reliable airline carriers.” (Loris, 2014). Turkish Airlines evidently does not have to worry about many of Porter's forces, therefore, allowing them to become stronger in relation to their competitors and can focus on keeping up with key market trends.

Looking into Turkish Airlines internal factors and its current marketing model, the company can be seen as being placed into the position of ‘Product Development' according to the Ansoff Matrix, as it is a new service in an existing market. (tutor2u, 2018) Introducing the idea of packaged holidays will help the business grow. Turkish Airliners already has a market penetration pricing strategy as it promotes future expansion plans in the Asian market.

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